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As it investigates a suspected kickback scheme in New York’s pension system, the Securities and Exchange Commission has been pushing to bar Steven L. Rattner, a prominent financier and former adviser to the Obama administration on the auto industry, from working in the securities industry for up to three years, according to three people told of the discussions.
But Mr. Rattner has fiercely resisted the proposed penalty, setting up a face-off with the federal government, according to these people, who spoke on the condition of anonymity because the negotiations are intended to be confidential.
It would be the most severe penalty for any of the Wall Street executives ensnared in the wide-ranging pension investigation, and it would carry a significant stigma for Mr. Rattner, whose rise in high finance catapulted him to the top of New York’s social and political hierarchy.
Mr. Rattner’s former firm, Quadrangle Group, paid $12 million in fines to settle with state and federal officials in April, but Mr. Rattner was left out of that agreement because he would not accept the S.E.C.’s proposal that he be barred from working on Wall Street, people briefed on the case said.
Now, the S.E.C. must decide whether to pursue separate civil charges against Mr. Rattner or drop the case altogether.
The attorney’s general’s office is not involved in the S.E.C. talks: Mr. Rattner was granted immunity from criminal action by Mr. Cuomo’s office in return for his testimony before a grand jury, said a person briefed on the matter. That deal has complicated Mr. Cuomo’s case against Mr. Rattner.